Some good news - I think I fixed the problem. Basically I removed all the non-standard widgets and rebooted the phone. I then re-added all the widgets. While adding, I also checked the settings.
For example, Audio Manager Pro has a setting for how often it updates itself - it was set to never. I changed it to every 1 mins (since the GN2 battery is so good).
So far I have gone the whole day without the problem happening again (usually it would happen within 2-3 hours and would need a reboot). Hope it can work for you also - I think it is a corner case problem, as I searched far and wide and this was the only account of the problem I could find.
I just rooted my phone tonight, so will see if it stays working with root also.